Market Power

How To Reduce Student-Teacher Ratios

Stacey Brook:

In a recent blog N. Gregory Mankiw - the author of the Principles of Microeconomics text I am using this Spring semester - discusses how Harvard during this hard financial time - could decrease the high student to faculty ratio, and comes up with three propositions. One is that Harvard administrators could increase the number of hires of economics faculty members and this would reduce student-faculty ratio; two make the economics major more difficult to enter and this would reduce the student faculty ratio; or three hope a well funded donor (an angel) donates lots of money to Harvard for the economics department. Since none of these seem to be likely, Harvard economics majors are stuck with large class sizes.

Yet, there is a fourth way, which for an academic is more controversial. If Harvard increased the teaching load of the economics faculty, this would reduce the student to faculty ratio. Now, I understand why Mankiw did not advocate higher teaching loads - doing so would increase the overall work load of faculty, and not many are advocating working more for the same salary. Yet, if the goal is to reduce student-faculty ratios, this would be the most budget nuetral.

As someone who teaches a 4-4 load*, I got a kick out of this post.  Seriously, though, I've taught Principles classes to class sizes as small as 30 all the way up to an enrollment of 500**.  I've taught what amounts to Intermediate Micro in classes ranging from 80 - 200 students.  Most of my Principles classes nowadays are right around 50 or so, and I can't imagine that there' much of a difference between teaching 3 classes of 50 each or 2 classes of 75 each.  There's probably a barrier, maybe between 80-100 students, where class size gets in the way of class discussion (in that the sheer size of the class drives students to be quiet who would be more likely to talk in a smaller class).

So, what is the optimal class size?

*I teach an MBA course in the spring semester that lasts for 8 weeks, but because it is a grad course it counts as a full class. 

Faculty also usually have the chance to get research reassignments in which faculty work on a research reassignment in exchange for not teaching a class.  I've received three of them so far.  Here's one paper that came from one of those assignments.  I gave a lecture based on the same paper a few years back.  Here's a pub from the second one.  The third paper is currently under revision for a resubmission.

**I tailgate at Mizzou games with two former students from that 500-seat lecture course.  I know one of them told me that he didn't come to class much.  I told him that it was no skin off my back because I wouldn't have noticed him anyways.  When he first introduced himself to me I thought "I have no idea who you are."

Black vs. White Graduation Rates in College Athletics

Jason Whitlock of the KC Star has penned one of the best columns on college athlete graduation rates, broken down by race, that I have read in a long time (maybe ever).

On Friday, shortly after Kansas knocked off North Dakota State in the NCAA Tournament, a sports writer for Minneapolis’ African-American newspaper asked me to comment on Lapchick’s latest study. I’m speculating, but based on the line of questioning, the reporter seemed to believe Lapchick’s report proves that the top basketball schools fail black athletes academically.

Never mind that the stats showed black athletes graduate at a higher rate than black non-athletes at the same schools.

Re-read that sentence. Think about it for a minute. I’ll wait.

...Many of the black athletes playing big-time college football and basketball have been recruited from at-risk environments — tough neighborhoods and single- or no-parent families.

I don’t know the stats on this. They’re never published by Lapchick or anyone. When it comes to academic studies, we always tend to break things down along racial lines. I’d love to see the stats broken down along parental lines.

I’ll bet every dollar I have that athletes from two-parent families perform better academically than athletes from one- or no-parent families, regardless of race.

For the most part, the universities don’t fail black athletes. They struggle to educate athletes from at-risk situations. And I’m not all that comfortable using the word “struggle” because the schools actually do a marvelous job supporting kids from difficult circumstances.

Read the whole thing. It isn't often that we see intelligent columns about such racially-charged issues such as racial graduation differences.  Then again, Whitlock isn't your average newspaper columnist.

How the Bad Leo Turned into the Good Leo

I've written before about how Mizzou was not Leo Lyon's first choice of schools.  Joe Posnanski gives a more in depth look at how Leo Lyons matured into one of the college game's better players. 

And when asked what he saw in Leo Lyons, Anderson shrugged as if to say: “Isn’t it obvious?” Lyons is 6 feet 9, has long arms and has the basketball grace of a smaller man. He can play inside or outside, he can handle the basketball, he can shoot it from outside, he can be a shot blocker, and when he’s determined and active, he is too quick and athletic to keep off the offensive glass. Yes, Anderson saw that Lyons could be the complete college basketball package. He could be a program changer.

Read the whole thing.

Step 1: Make Bad Business Decision. Step 2: ??? Step 3: Profit!

From today's Wall Street Journal:

Credit-rating companies, widely assailed for their role in fueling the financial crisis with overly rosy debt ratings, stand to make a billion-dollar windfall in the government's latest attempt to heal the credit markets.

The new rescue effort, run by the Federal Reserve, kicked off Thursday with bond deals totaling more than $7 billion. Each bond issue will need to be blessed by at least two of the three big rating firms: Moody's Investors Service, Standard & Poor's Ratings Services and Fitch Ratings.

Wow.  Just wow.  You'd think that someone who'd made bad business decisions would get punished for that decision.  It's bad enough that American car assemblers and various banks got bailed out for making bad decisions, but now the credit ratings may see a boom in business indirectly from something they apparently had a hand in creating? 

Update:  Ed Sweeney emails me to let me know that the WSJ has issued a correction to the story.

Credit-rating companies cap their fees for rating asset-backed securities. An earlier version of this article failed to cite the fee caps and incorrectly estimated that individual firms could earn $1 billion in revenues from rating securities under the Term Asset-Backed Securities Loan Facility. Depending on the kinds of securities issued and the ultimate size of the program, the industry could earn tens of millions to a few hundred million dollars, based on Wall Street Journal estimates. For the initial $7 billion in TALF-eligible deals mentioned in the article, Standard & Poor's says it was paid less than $700,000.

Ed notes in his email:

The WSJ issued a correction today admitting to miscalculating the $1.2 billion figure the article cites. Standard & Poor’s so far has rated over $7 billion worth of TALF-eligible securities and has been paid less than one basis point, or .01%, for its work. In addition, S&P caps its fees on asset backed securities.

Update:  Ed also included a link to this Standard and Poor's fact sheet regarding S&P and TALF.
Thanks to Ed for letting me know about the correction.

I Can Haz Houzing Bubblez, Againz? K. Thx.

I guess the Fed's prescription for the recession caused, at least in part if not largely, by a housing bubble is to lower mortgage rates.  Won't this lead to another housing bubble?  Isn't this a further printing of money that may lead, in the short term at least, to higher inflation rates?

I Can Haz Inflation?

Today's news:  the Fed has taken a step to jolt the economy, one that causes me to shake my head.

The Federal Reserve ramped up its efforts to resuscitate the sagging economy, saying it would purchase up to $300 billion of long-term U.S. Treasury securities in the next few months and hundreds of billions of dollars more in mortgage-backed securities.

In other words

With rates near zero, the Fed is now essentially printing money to increase the supply of credit in the economy.

More money chasing limited resources.  Sounds like inflation to me.  If so, how long will it be until the Fed shrinks the money supply to bring inflation under control, thereby bringing another recession to the front (as happened in the early 1980's)?

How to Kill off Farmer's Markets and Craft Brewers

Congress has introduced a bill that may kill off farmer's markets.  It has the pleasant enough name of the "Food Safety Modernization Act."  But one consequence is that by introducing a new level of federal regulation (and thus increase the cost of doing business), it may just kill off farmer's markets.  And not only this, it might just kill off the craft brewing industry since the definition of food, as currently written in the bill, is anything that is to be used as food or drink for a human (or an animal) or any components thereof.

HT Michael Silence via Instapundit

North and South Dakota are Probably More Diverse Politically Than Your Average University

From the "I Can't Believe This Got Published" file:

If challenged to do so, relatively few Americans could probably find North and South Dakota on a map, let alone correctly name, spell, and pronounce the capitals of the two states. Nor would they be able to recall anything interesting about the Dakotas, whose main tourist attractions, besides Mount Rushmore, are a drug store, a civic arena festooned in corn, and a peace garden. Although one of the Dakotas bills itself as “The Land of Infinite Variety,” its sociocultural diversity consists primarily of different synods of Lutherans who engage in endless disputation with one another because they are so similar. Dakotans prefer their food bland—they consider ketchup daringly spicy—and their politicians low-key. When they encounter something new, they call it “different,” which they rarely mean as a compliment, and they wait for it to go away—which, because there is so little to hold it in the Dakotas, it probably will do. They keep their opinions to themselves (a typical Dakotan being the fellow from Sioux Falls who loved his wife so much that he almost told her), and they do not like it when people make a fuss about themselves or anything else. Thus, when South Dakotans perceived the previously popular Senator George McGovern as having gotten too big for his britches by seeking the presidency in 1972, they saw to it that he would fail to carry his home state, and three decades later they voted long-time Senator Tom Daschle out of office as soon as he repeated McGovern's mistake of seeing a president whenever he gazed into a mirror.

Actually, I thought salt and pepper were exotic spices up here in the northlands.

Oh, BTW, how'd that Tom Daschle thing with the Big O work out?

HT to Kip over at Facebook.

Getting to Know the Big Red of Cornell

Mizzou plays Cornell in the first round of the NCAA tournament.  Here's a link to all you need to know about the Big Red.  A snippet:

Cornell is located in Ithaca, New York, a city best known for its vegetarian restaurant Moosewood Restaurant, its Dalai Lama (the North American seat for the 14th one is there, whatever that means), and its being a city in New York not named New York City. It's essentially the Jefferson City of New York, so they've got that going for them.

Via Tigerboard

Big Brother is Watching You

From the Chicago Sun-Times:

Chicago could rake in “at least $200 million” a year — and wipe out the entire projected deficit for 2009 — by using its vast network of redlight and surveillance cameras to hunt down uninsured motorists, aldermen were told today.

The system pitched to the City Council’s Transportation Committee by Michigan-based InsureNet would work only if insurance companies were somehow compelled to report the names and license plates of insured motorists. That’s already happening daily in 13 states, but not here.

The data would be entered into the National Law Enforcement Telecommunications System (NLETS), the information-sharing network that links federal, state and local law enforcement agencies.

When a camera spots an uninsured vehicle driving on Chicago streets, a citation would automatically be generated and sent to the registered owner.

This is really scary, particularly to catch people for committing what amount to victimless crimes.

HT to Instapundit, who wonderfully quips:

.I’m more interested in what we could find if banks were somehow compelled to report the financial affairs of Chicago aldermen. . . .